I have a friend asking me about the banker telling an 80 year old client about an IRS penalty on withdrawals? I am familiar with the early withdrawal penalty if too young, and the minimum withdrawals required, but do not know what this could possibly be on withdrawals made. Any help?
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Penalties for ira
Maybe they are talking about penalties for not taking withdrawals? -
Your friend needs to ask the banker for more specifics.
For a 80 yr old person, most likely it is Required Min Distributions. And the penalty associated with that.
If the bank has a CD in the IRA and they are trying to change it or withdraw more than the RMD, there may be a penalty from the bank.Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDRComment
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Rmd
Most likely the issue being raised is related to RMDs, which of course would have begun at age 70 1/2.
If so, there have been numerous (recent) threads on that topic.
In the meantime, you should take a look at Part VIII of Form 5329.
As ATSMAN noted, there could also be some (separate) issues with premature withdrawal/cancellation of some CDs.
You need more facts. . .
FEComment
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